UPDATED: House passes $11B budget, increases spending 10%

CONCORD— Down party lines, the House Wednesday voted 194-172 to approve an $11 billion, two-year operating budget that supporters say begins to restore programs slashed two years ago, but that opponents say significantly expands government.

The House-passed budget would be a 10 percent increase in all funds, and a 4 percent increase in state general fund spending over the next two years at $2.7 billion.

The House also passed the companion bill containing the changes in law needed for the operating budget on a 193-166 vote.

The budget resembles Gov. Maggie Hassan's proposal, but without $80 million in casino licensing fees, and with less money for the University System of New Hampshire, charter schools, school building aid and hospitals.

"This budget makes investments in our people and our communities that the public has told us they want," said House Finance Committee member Cindy Rosenwald, D-Nashua, "and does so in a fiscally responsible manner."

But Republicans argued the proposed budget raises taxes and fees, hurts New Hampshire businesses and the state's economy, and downshifts costs to counties which will drive up local property taxes.

Former House Speaker William O'Brien, R-Mont Vernon, accused Democrats of trying to hide the real size of the budget increase through gimmicks and hidden tax and fee increases.

"Last term we set the standard for a fiscally responsible budget. That is a standard we should aspire to," O'Brien said. "I'm asking you to abandon your talking points and abandon the boogey-man philosophy and vote with the hard-working taxpayers and small businesses of New Hampshire."

After the budget vote, Hassan said much works needs to be done to begin restoring the programs and services cut by the last legislature and again pushed for the House to approve one casino on the southern border of the state to provide additional revenues.

"Significant work remains in order to finalize a responsible, balanced budget that reinvests in the priorities needed for job creation and innovative economic growth," Hassan said. "The House budget as it stands falls short of our balanced budget proposal in key areas that are critical for strengthening our economy and improving the health and well-being of our people."

She singled out cuts made to the University System of New Hampshire, to uncompensated care to the state hospitals, to Health and Human Service funding and school building aid.

"The House budget looks to spend millions of dollars in revenues the Senate will not approve and the state should not expect," Morse said. "I also have concerns with a number of policies included in the House budget, such as allowing the governor significant latitude to raid dedicated funds as well as the suspensions of the newly enacted school building aid program and job-fostering business tax reductions."

He too urged the House to pass casino gambling.

House Speaker Terie Norelli, D-Portsmouth, praised her budget writing committees for their work.

"We delivered a balanced budget to the Senate, which presents our priorities and makes clear our desire to restore investments in New Hampshire's people and communities to ensure long term prosperity," Norelli said.

During the debate on the budget package, Republicans proposed 16 amendments, although none were successful with votes down party lines.

Republicans tried to reduce the 30-cent tobacco tax increase in the budget by 10 cents, but failed on a 197-168 vote.

"We are doing this to balance the budget on the backs of the poor and once again to tell people how they should behave." said Rep. Neal Kurk. "I don't believe that is the New Hampshire way."

Republicans tried to resurrect charter school funding and to remove the moratorium on new charter schools, audits of publically funded charter schools and greater Board of Education greater oversight over new charter schools, but were unsuccessful.

GOP members also wanted to limit the dedicated funds the administration could tap to close a possible budget deficit for this fiscal year which ends June 30.

"Our governor is not king and must not be granted king-like powers," said Rep. Steve Vaillancourt, R-Manchester.

An attempt to exempt dam maintenance, state parks, E-911, Land and Community Heritage Investment Program and a number of other dedicated funds also failed. "Who gets to determine the scared cows?" asked House Majority Whip Dan Eaton, D-Stoddard.

Republicans proposed a series of amendments to restore funding to school building aid, business tax reductions and county long-term care programs by cutting uncompensated care money for the state's largest hospitals.

The largest hospitals do not receive state help for uncompensated care costs in the current budget, but the House budget added $115 million for uncompensated care, which is $33 million less than Hassan proposed.

Democrats said state help is needed to convince hospitals to join the managed care Medicaid program.

The managed care program was supposed to start a year ago and save about $16 million the first year, but hospitals — 10 of whom are suing the state over its payment rates for Medicaid services — have to date refused to join the networks.

Also, the House voted 229-126 to killed a moratorium on wind farms and electric transmission lines, something recently rejected by the Senate and retained by the House Science, Technology and Energy Committee.

"The projects today are of such a size and scale they affect the very nature of our state, the image we have of ourselves and the image we project to others," said Kurk.

The House's proposed budget has about $110 million less than revenue proposed by Hassan.

House budget writers makes up the difference by lowering health and human service caseloads in several program saving tens of millions of dollars, cutting $12 million from USNH and $7 million from school building aid, but the plan leaves in intact about $28 million for the mental health system, additional money the developmentally disabled and fully funds the NH Community College System.

The budget includes the expansion of Medicaid eligibility under the federal Affordable Care Act and a 12-cent gasoline tax increase over three years to raise $633 million to repair and rehabilitate the state's roads and bridges.

The House's proposed budget has about $52 million less spending than the governor's proposal.